The rising gig economy

There are more than 5,000 Uber drivers in the country! This is according to an Uber driver I recently spoke with while en route to the office. He said the drivers’ social media group is composed of thousands of member drivers; and most of them are part-time drivers who have full-time jobs at night or day, either as a call center agent or another professional worker; or they are just full-time Uber drivers.

They are part of the underemployed labor force, defined by the Philippine Statistical Authority as “persons who express the desire to have additional hours of work in their present job, or to have additional job, or to have a new job with longer working hours.” While this part of the labor sector has declined to 16.3 percent, or 1.6 million workers fewer than last year’s 19.7 percent, the unemployment rate increased by 0.9 percentage point to 6.6 percent from 5.7 percent in the comparable period.

Experts attribute the rise in unemployment partly to the wait-and-see attitude of investors in relation to policy uncertainties of the government, and issues in the US such as the stance of President Donald Trump against the outsourcing of jobs. But what’s not clear is the impact of that part of the labor market characterized by short-term contracts or freelance work, as opposed to permanent work, known these days as the gig economy.

One of the drivers of the gig economy is digital technology. High-speed broadband, software applications which are subscription-based on the cloud, and inexpensive data storage, enable gig economy workers to take on extra or freelance work from anywhere in the world. For example, a Photoshop expert in Iligan has taken on photo editing work from the US for 250 USD for three nights of work.

Another driver is the growing desire of the new generation of workers, mainly millennials, to work from home or part-time to enjoy traveling anytime, or simply just to stay with family. Gig economy workers can work at their own pace, their own time and in their preferred locations.

These have given rise to the gig economy which has been growing for several years, especially in first world countries, where infrastructure is more advanced and gig work is more acceptable. In the US alone, research findings from Adobe revealed that as many as a third of American office workers had a second job and more than half (56 percent) predicted we would all have multiple jobs in the future. Freelancer portal, Upwork and the Freelancers Union revealed that more people than ever are choosing to work freelance, up to 55 million this year, or 35 percent of the total US workforce. LinkedIn predicts that this will rise to 43 percent by 2020. Not surprisingly, 71 percent of them are happy, according to a survey by TIME magazine.

In the Philippines, there are more than a million registered freelance workers in Upwork and Freelancer.com according to industry experts I interviewed. But there’s no clear indication if they are part-timers of full-time workers. More than 500,000 of these are business process outsourcing (BPO) full-time workers who spend an additional two-hour gig in other BPO companies for extra income.

It’s laudable that the government, through the Department of Information and Communications Technology (DICT), recognizes the potential of the gig economy to provide meaningful work to rural folks who are otherwise left out in the industrialization of cities. DICT brings BPO work to rural areas where there’s high population but low employment through Rural Impact Sourcing (RIS). According to the DICT site, “Rural Impact Sourcing takes on the challenge to train and develop its supply of potential Impact Sourcing workers to ensure constant quality for the service they can provide. On the other hand, it is also geared toward generating demand for more outsourcing companies by striving to create an ecosystem within the prospective area that would provide benefits to such companies.”

All these augur well for the future of gig economy in the country, considering our two core competencies that cannot be replicated by any country: our people’s natural creativity and natural hospitality. In my previous articles, I argued that because of these two factors, our country has been the top exporter of either workers for overseas jobs or talents for business process outsourcing, or fields where the Filipino’s creative talents excel – photo editing, writing, artwork, etc; and customer service – and for call center work, hotel and cruise workers, AirBnB operators, etc.

The impact of the gig economy will just be bigger in the future. Our government, human resource practitioners, and labor groups will have to evaluate and assess their role in hastening this growth.

The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be emailed at reylugtu@reylugtu.com.

The author is a senior executive in an information and communications technology firm. He is the chairman of the ICT Committee of the Financial Executives Institute of the Philippines (FINEX). He teaches strategic management in the MBA Program of De La Salle University. He is also an adjunct faculty of the Asian Institute of Management.